Inheritance of RS in Europe will become simpler
2015-08-13. News for Lithuanian citizens, who own or inherit real estate abroad: as of the next week a new procedure takes into effect, according to which a process of inheritance of real estate located in the other EU country is going to become simpler and faster. In addition to pain, person’s death causes concern for his relatives connected with inheritance of property. Thus, a lot of problems arise if the inherited real estate is located in the other foreign state. “However, as of the next week solving property matters arising due to person’s death will become simpler,” Herkus Gabartas, lawyer of “Bukauskas ir partneriai“ / “PwCLegal“ Law Office, stated. Privileges for successors/heirs will be introduced in accordance with provisions of the Regulation of the European Parliament and Council No. 650/20012, coming in effect on 17 August.
Currently – a major issue
According to Mr. Gabartas, currently most problems for successors arise due to the fact that real estate located abroad is inherited in accordance with the law of that foreign country, where such real estate is actually located. Lithuanian notaries do not issue certificates of inheritance with regard to real estate located in other countries. For instance, if a Lithuanian citizen has an apartment in Spain, currently, in the event of his death his successors cannot inherit such apartment by only applying to a Lithuanian notary. The Spanish law of inheritance is valid with regard to such apartment, so, it can only be inherited after applying individually to a relevant institution in Spain. “So, successors must go through two processes of inheritance: one in Lithuania, and another – in a foreign country, where an inherited apartment of a house is located. The process is quite complex, long and expensive: a person has to go that foreign country, hire local lawyers, as it is difficult to observe all formalities in a foreign country without their assistance. Each country has its won institutions and inheritance rules, so a testator and a successor may have a lot of problems in order both to determine the fate of such property in the event of the death and to inherit it,” Mr. Gabartas said.
Lithuanian notary is enough
And as of 17 august, upon the entry into force of the new procedure a person will be able to specify in advance in his will the country, whose law is to be applied to his entire heritage, including real estate abroad. For instance, Lithuanian citizens may choose to apply Lithuanian law to their heritage. The European certificate of inheritance will be made in accordance with the regulation, which will be issued by notaries. Its scope of validity will be essentially equal to validity of the certificate of inheritance. With this certificate a person will be able to accept inheritance and register inherited property without any special procedures in all EU countries, except the United Kingdom, Ireland and Denmark. This will make inheritance of real estate abroad simpler and faster. “A Lithuanian citizen, who owns an apartment in Spain, will be able to specify in his will application of Lithuanian law to his entire heritage. Then Lithuanian law, but not Spanish law, will also be applied to his apartment in Spain. It will significantly simplify a procedure of inheritance of a property, located in Spain. A Lithuanian notary will issue the European certificate of inheritance to a successor. Using this certificate, the successor will be able to accept inheritance and register inherited property abroad without any additional procedures. He will only have to submit this certificate to the centre of registers of that country and make a property over in his own name,” lawyer explained.
The new procedure will also ensure reduction of number of conflicts, which currently arise due to the fact that rules for distribution of estate between successors valid in that foreign country, where the inherited real estate is located, are different from rules valid in Lithuania. “For instance, in Lithuania children will any way inherit a certain part of a property in a mandatory manner if at the moment of death of his parents he needed support, even if the will stipulates otherwise. And in some European countries the entire property may be bequeathed to one successor unconditionally or children may lay claims to 2/3 of a heritage, and etc. As laws of the country of location is applied to real estate, it may occur that a house of an apartment abroad, owned by a Lithuanian resident, will be distributed between successors otherwise than is stipulated in Lithuanian laws or specified by a testator in his will. And the new procedure will make it possible for people to choose to apply, for instance, Lithuanian law to their heritage abroad and avoid such conflicts,” Mr. Gabartas explained. Though, inheritance privileges will not be valid in the entire European Union. In the United Kingdom, Denmark and Ireland real estate, owned by Lithuanian citizens, will still be inherited in accordance with national law of these countries. The European certificate of inheritance will not be valid in these countries, so, in order to inherit a house or an apartment, you will have to observe rules for inheritance of real property valid at its location. For the time being, the Lithuanian Chamber of Notaries (LCN) withholds lengthy comments on the new procedure. “Regulation provisions are new and not tested through practice, so impact of this procedure is difficult to predict. Comments on the regulation may only be made only a certain period after its entry info force. Then it is seen how it really works,” Marius Stračkaitis, Klaipeda notary and President of LCN, said to VZ.
Spain is ahead
The scope of real estate purchased by Lithuanian citizens in various foreign countries is not known. The State Tax Inspectorate (STI) only records income earned by Lithuanian citizens from selling real estate abroad. In 2014 residents of our country have earned most income from selling real estate in Spain, the second place is taken by the United Kingdom, then Germany, Latvia and Bulgaria. Therefore, there is a probability that a considerable part of property, owned by Lithuanians abroad, is located in these countries.
20.000 wills annually
According to Mr, Gabartas, to use the possibility of simplified inheritance of real estate, provided by the regulation, a person will have to make a will and specify the country, whose law should be applied with regard to inheritance of his property abroad. “Without having it done a person will not be able to use the privileges. Therefore, it is probable that the regulation will encourage more people to make wills,” lawyer thinks. According to the Register of Testaments, over 20.000 wills are being registered annually since 2002. In 2014 24.835 wills were registered, and within seven months of this year 13.170 wills have been registered. Mostly wills are made by elderly people. Young people often decide to commit their will to writing before emigration or departure abroad for permanent residence.